I’ve posted Entry #79 to my weekly Valuation-Informed Indexing column at the Value Walk site. It’s called Rational Man Economics Caused the Economic Crisis.
Juicy Excerpt: All that Fama did was to apply an idea that had become popular in the economic world in the stock investing world. What we are seeing today is what happens when a half-baked idea is given enough influence to do lots of people lots of harm. When the Rational Man concept was only something people talked about in economics textbooks, it could only cause so much trouble. Today, it is an idea that influences how millions of people invest their retirement money. That’s a very different thing and a much more dangerous thing.